Podcast: Critical new considerations for September 15 estimated tax payments. 80. The new legislation supersedes AB 1577. Copyright 2023 BDO USA LLP. 229 0 obj <>/Filter/FlateDecode/ID[<53445A688FC0F84BB5871A6886EB3172>]/Index[211 40]/Length 93/Prev 93697/Root 212 0 R/Size 251/Type/XRef/W[1 3 1]>>stream Not-for-profit organizations and higher education institutions, Transportation, logistics, warehousing and distribution, Operation and organizational transformation, Blockchain, digital assets & Web3 solutions, Do not sell/share my personal information. 1577) into law. Our audits ensure confidence in our clients financial information. (209) 527-4247 (fax). We can harness the power of people, process, data and technology to transform your companys tax operating model into a strategic function of the business. Assembly Bill 80 (AB 80) allows qualifying taxpayers to exclude from California gross income Paycheck Protection Program (PPP) loans that have been forgiven, and advance grants provided under the Economic Injury Disaster Loan (EIDL) program. Governor Gavin Newsom has signed Assembly Bill 80, to amend the law. 1 A.B. 117-6). On Sept. 9, 2020, which was after the IRS released Notice 2020-32 but before the CAA was signed, California enacted legislation, A.B. Be ready to demonstrate diligence for the FCPA. This agreement builds on Governor Newsoms proposal and in many ways, enhances it so that we can provide the kind of immediate emergency relief that families and small businesses desperately need right now, said Senate President pro Tempore Atkins. California Law Excludes PPP Loans Forgiven Under The Cares Act From 80, gross receipts from the fourth quarter of 2020 may be compared to the fourth quarter of 2019 only with respect to an application submitted on or after Jan. 1, 2021. See 15 U.S.C. Larger firms that took out higher loans would still be subject to the same ceiling of $150,000 in deductibility. Due to the timing of A.B. 1577, addressing the treatment of PPP loans for tax years beginning on and after Jan. 1, 2020.7 Consistent with IRS Notice 2020-32, this legislation generally provided that forgiven PPP loan amounts would be excluded from the borrowers gross income, but that associated deductions would not be allowed for expenses paid with forgiven PPP loans. ODE0ZjA1OTZlMmYzNGViM2E4NWJiYTMwNzQ0N2I2YmVhZTE1MDVlNWJjOTJk The treatment of deductions, basis, and tax attributes for California income tax purposes may differ from the federal income tax treatment. This tax treatment would also extend to the Economic Injury Disaster Loans as well. eligibility) criteria for receiving a second draw PPP loan for federal income tax purposes under the CAA.13 Although this requirement only applied to second draw PPP loans for federal income tax purposes, it appears to be incorporated as a general limitation for California purposes when determining whether a taxpayer is classified as an ineligible entity under A.B.

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